In Depth

The Indiana Court of Appeals has determined a Marion County judge properly granted summary judgment in favor of a group of
insurance companies because the city of Evansville was seeking coverage for projects aimed at preventing future sewer discharges,
rather than remediating past discharges, which wouldn’t be covered by the policies.

The case involves Evansville’s century-old sewer system that partially drained into local waterways and led to pollution
discharge permit disagreements in 2005 with the Environmental Protection Agency and Indiana Departmental of Environmental
Management. The city sued in 2007 seeking declaratory judgment against some of its insurers that they must provide coverage
under the policies. The trial court eventually concluded the insurance policies at issue did not provide any coverage for
the plaintiffs in the alleged liability, including fines and penalties as a result of the government’s actions against
the city.

In analyzing the case, the appellate judges relied on the Indiana Supreme Court’s decision in Cinergy Corp. v.
Associated Elec. & Gas Ins. Services, Inc., 865 N.E.2d 571 (Ind. 2007), known as “Cinergy I”,
and the line of subsequent Cinergy cases from the Court of Appeals in the years following.

“The holding of Cinergy I is that prevention of future environmental harm, rather than remediation of past
contamination, is not an ‘occurrence’ under insurance policies, and the policies at issue here contain similar
provisions,” Barnes wrote. “The differences between the instant action and Cinergy I do not impact that
ultimate holding.”

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